Supply may not meet demand for B.C. lumber exports
Pine beetle-ravaged forests may have trouble supplying growth in U.S. home construction
By Derrick Penner, Vancouver Sun November 20, 2014
British Columbia’s forest sector is going to lead growth in the province’s exports next year to feed burgeoning new-home construction in the U.S., but lumber makers will also start running up against constraints in timber supplies, according to Export Development Canada.
The value of B.C.’s export trade in lumber and wood products, worth $11.6 billion in 2013, will increase 11 per cent this year and another 12 per cent next year as American homebuilders continue increasing the number of units they build as part of the U.S. economic recovery, said Peter Hall, EDC’s chief economist.
However, Hall added, B.C. lumber producers are starting to be squeezed by declining timber supplies in the province’s mountain pine beetle-ravaged forests.
“In terms of fibre we have in (B.C.), yes, the intelligence we’re getting from B.C. companies is that this is the year it is first going to hurt,” Hall said.
He added that some mills face bigger constraints in timber supplies than others, but “across the board, in general, there will be a slight decline in what we can produce.”
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“There’s not enough fibre to go around,” said Keta Kosman, analyst and publisher of the industry newsletter Madison’s Lumber Reporter. “Ten years ago that wasn’t true, but given the pine beetle, there are too many operators in the same area (in some locations).”
She added that most mills that are operating now aren’t running at full capacity. The overall industry is operating at 85 per cent.
Kosman expects more of the timber-supply constraints to emerge over the next two years.